Regulatory: Do agencies have the power to determine the scope of their own jurisdiction?

In 1984, the Supreme Court dealt with the question of whether agencies have the power to construe the statutes they are assigned to administer. In Chevron USA v. Natural Resources Defense Council, the court gave administrative agencies broad authority to interpret the laws they are charged with administering. The court held that if Congress has explicitly left a gap for the agency to fill, then the agency is expressly delegated authority to fill the gap. Sometimes delegation of authority to an agency is implicit rather than explicit. The court held in such cases a court may not substitute its own construction of the statute for that of the agency. The court, citing an earlier case, summarized the rule as follows: “If this choice represents a reasonable accommodation of conflicting policies that were committed to the agency’s care by the statute, we should not disturb it unless it appears from the statue or its legislative history that the accommodation is not one that Congress would have sanctioned.”

Now before the Supreme Court in City of Arlington v. FCC is the question of whether or not similar rules apply when an agency is determining the scope of its own power and jurisdiction. Should the courts defer to an agency’s determination of the scope of its jurisdiction the way courts defer to agency judgment in administering their substantive areas? This question is controversial. One commentator has said, “Just as foxes should not guard henhouses, agencies should not be entrusted to police the limits of their regulatory authority.” Others, notably the agencies themselves, argue that agencies are in the best position to determine the scope of a congressional grant of jurisdiction.

City of Arlington involves the Federal Communication Commission’s (FCC) administration of the Telecommunications Act of 1996 (TCA). The FCC is charged with regulating the national cellular telephone network. The TCA directs the FCC to address radio frequency matters. At the same time, the statute took a “cooperative federalism” approach to matters related to zoning for the construction of wireless transmission facilities. The act states “nothing in this Act shall limit or affect the authority of a State of local government or instrumentality thereof over decision regarding the placement, construction, and modification of personal wireless service facilities.”

In response to the statutory approach of the act, states and local governments adopted various zoning rules. As would be expected, the state and local rules varied widely, as did the time limits contained with those rules. The individual rules dealt with various interests of the states, including, for example, specific environmental assessment rules in California, longer time periods in Connecticut and the like.

This left the wireless industry to comply with the myriad of conflicting zoning rules from the various state and local jurisdictions. In 2008, the wireless industry requested the FCC to adopt rules requiring short, uniform deadlines for state and local zoning action under the Communications Act. In response, the agency adopted such uniform zoning rules, requiring state and local governments to act in accordance with both the act and limitations defined by the agency. The FCC took this action even in view of the statutory requirement that nothing in the act limits state or local zoning authority and essentially overruled various state zoning laws.

In City of Arlington a number of states, local governments and others challenged the FCC rules, arguing that the measures extended beyond the jurisdictional limits of the Communications Act. The 5th Circuit has upheld the FCC rules applying Chevron. The court held that the deference to agency action delineated in Chevron extended to a determination by the agency of the scope of its own jurisdiction. Thus, even in view of the TCA’s provision that nothing in the act shall limit state or local authority over zoning, as well as some clear legislative history discussing the desire for a cooperative federalism approach, the circuit court held the FCC had authority to impose uniform zoning rules on the states.

Other circuits have taken an entirely different approach, holding that Chevron deference does not extend to a determination of the scope of agency jurisdiction. For example, the 7th Circuit has said that “although agency determinations within the scope of delegated authority are entitled to deference, it is fundamental that an agency may not bootstrap itself into an area in which it has no jurisdiction.”

Since there is a clear conflict in the circuits, the Supreme Court has granted certiorari. Petitioners believe “the limits of an agency’s jurisdiction is purely legal, not a policy, question that does not implicate agency expertise.” Therefore, they believe the FCC rule should be overturned.

Oral argument before the Supreme Court has been completed and a decision is expected later this term.